Question

Resset Co. provides the following results of April’s operations: F indicates favorable and U indicates unfavorable. Applying the management by exception approach, which of the variances are of greatest concern? Why?
Direct materials price variance . . . . . . . . . . . . . \$ 300 F
Direct materials quantity variance . . . . . . . . . . . 3,000 U
Direct labor rate variance . . . . . . . . . . . . . . . . . 100 U
Direct labor efficiency variance . . . . . . . . . . . . . 2,200 F
Controllable overhead variance . . . . . . . . . . . . . 400 U
Fixed overhead volume variance . . . . . . . . . . . . 500 F

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• CreatedNovember 29, 2013
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